WTC Attacks: $10 billion in real estate loss

NEW YORK — Jones Lang LaSalle, a global real estate services and investment management firm, estimates that losses to real estate destroyed and damaged in the World Trade Center (WTC) terrorist attack could range up to $10 billion. This figure includes damage to buildings surrounding the site where the twin 110-story towers once stood.

In Manhattan, the immediate loss of office space totals 25 million sq. ft., and the net loss over the next 12 months is expected to be more than 20 million sq. ft. — 18.5% of the downtown office market.

"In New York, Jones Lang LaSalle continues to help find office space for clients displaced by this horrible tragedy," said Ken Siegel, managing director in the firm’s tenant representation group. "Since short-term demand for temporary office space is very high, our teams are working closely with our clients to define and secure their short- and long-term space requirements."

In lower Manhattan, the immediate loss is roughly 15 million sq. ft. of property, according to the report. Of this number 12.7 million sq. ft., or 11.6% of the total office space in the area, was destroyed and another 2.3 million sq. ft. has been damaged or declared structurally unsound. More than 10.7 million sq. ft. of property sustained damage, including 5 million sq. ft. that will be taken off the market for at least one year for extensive repair and reconstruction.

On a positive note, 5.7 million sq. ft. should be ready for occupancy in less than 12 months.

Jones Lang LaSalle expects nearly all of the approximately 26 million sq. ft. of available sublet space and direct space will be filled in the weeks ahead in order to accommodate office space needs of dislocated firms.

After last week’s loss, the total Manhattan real estate market now stands at 328 million sq. ft., still the largest office market in the world after Tokyo.